Effects of a Physician Office Generic Drug Sampling System on Generic Dispensing Ratios and Drug Costs in a Large Managed Care Organization

BACKGROUND: Greater use of generic drugs, particularly as measured by the generic utilization or dispensing ratio (GDR), is an effective means of managing care by attaining the same clinical outcome as brand drugs but at lower cost.Health plans encourage members to use generic drugs through copayments that are lower than for brand drugs. Encouraging physicians to prescribe generic drugs in therapeutic selection continues to be an opportunity for health plans to produce drug cost savings without compromising safety or efficacy. OBJECTIVES: To determine if the addition of an automated generic drug sampling system in primary care physician offices would increase (1) the GDR of the sampled therapeutic categories and (2) the overall GDR. METHODS: To encourage prescribers to increase their use of generic pharmaceuticals,this managed care organization of 2.3 million members with pharmacy benefits, who represent about two thirds of approximately 3.5 million total health plan members, collaborated with a vendor that developed an automated generic medication sampling intervention that takes place in the physician’s office at the point of care. The generic sampling system (kiosk) included21 distinct generic drugs in 36 variations of dose and strength. To isolate the effect of the generic sampling intervention from the general trend of greater generic drug use, we compared physicians participating in the generic sampling program with all other network physicians. Because formal statistical testing of program outcomes was precluded by incomplete physician data, we performed a descriptive, business-case analysis of the program. RESULTS: Before implementation of the generic sampling program, the physicians in the intervention group and the comparison group had the same GDR of 47.8%. In the first full year of the intervention in 2005, the 301 physicians participating in the generic sampling program had a GDR of 55.3% compared with 54.1% for all of the other approximately 33,000 network physicians. This absolute 1.2 percentage point difference narrowed to 0.8 points in 2006 (59.9% vs. 59.1%). After subtraction of payments made to the vendor of the generic samples, including all administrative costs, the direct drug cost savings were estimated to be $397,486 in 2005 and $453,545 in 2006. The direct drug cost savings per physician participating in the generic sampling program were estimated at $1,321 in 2005 and $719 in 2006. Members paid no copayment for the generic samples and paid lower copayments throughout the continued use of the generic drugs for chronic conditions such as hypertension. CONCLUSIONS: Physician practices that participated in the generic sampling program demonstrated an increase in the average GDR that was slightly greater than the increase in the comparison group of all other network physicians in each of the 2 measurement years, 2005 and 2006. Direct drug cost savings after subtraction of all administrative costs associated with the generic sampling program were estimated at $1,321 per participating physician in 2005 and $719per participating physician in 2006. Members benefited from no copayment for the generic drug samples and from lower copayments for continued use of the generic drugs.

W hile increases in prescription drug expenditures have moderated in recent years to more closely match the annual increases in hospital and physician expenditures, prescription drug expenditures account for a much larger share of total health care expenditures today compared with 10 years ago. 1 Escalating prescription drug costs affect consumers and health plans alike. Consumers struggle with financially managing their prescription drug regimens while health plans attempt to provide comprehensive benefits at affordable prices.
When confronted with high prescription drug expenses, consumers may engage in cost management strategies that adversely affect compliance and decrease the overall effectiveness of medication therapies. 2 Research shows that 1 in 5 patients have chosen not to fill a prescription because of its cost and 1 in 6 patients have taken a medication less frequently than prescribed in order to save money. [2][3][4] Behaviors such as skipping scheduled doses or taking a medication every other day decrease the therapeutic value of a drug regimen while increasing risks of future complications.
Health plans strive to improve patient outcomes while harnessing rising prescription costs. Encouraging the prescribing and dispensing of generic medications are mechanisms by which payers attempt to reduce costs without sacrificing clinical efficacy or member safety. Health plans have long promoted generic substitution. As regulated by the U.S. Food and Drug Administration, generic drugs must contain the same active ingredients and have the same strength and dosage form as their brand name counterparts. 5 Therefore, these medications possess the same therapeutic value but at a reduced cost. Many generic drugs are manufactured by the same companies that produce the brand-name products. 6 These factors lend credibility and reliability to the promotion of generic prescribing by health plans.
Common strategies such as formulary management, drug benefit designs, and copayment differentials are intended to change behavior of members and prescribers with the intent of promoting generic use across a plan' s network of physicians and thereby across its total membership. It is estimated that a health plan' s pharmacy spending decreases by 1 percentage point for each 1 percentage point increase in the generic dispensing ratio (GDR). 7 This represents a significant opportunity for savings. Additional opportunities exist to optimize generic prescribing, including physician education regarding the safety and efficacy of generic medications as well as the importance of managing patients' out-of-pocket costs. 8,9 As more drugs reach the end of their patent lives, significant savings will be realized from the increased use of generic drugs, and health plans have an unprecedented opportunity to improve the value of pharmaceuticals by maximizing therapeutic selection and generic substitution. Generic drugs now account for more than 50% of all prescriptions filled in the United States and more than $40 billion in prescription sales worldwide. More than $80 billion worth of global blockbuster drugs (including Coreg, Imitrex, Lamisil, Lotrel, and Norvasc, available in generic form as of April 2007) face U.S. patent expiration by 2008, which will increase the focus on cost savings with generic drugs. 10 Sampling of branded pharmaceuticals remains a barrier to optimizing generic dispensing ratios (GDRs). Providing a patient with a branded medication free of charge would appear to provide a temporary solution to the financial burden associated with high out-of-pocket costs. However, the immediate solution becomes a longer-term problem because the brand drug has a higher copayment for the member and a higher net drug cost for the plan, compared with a generic alternative. Here is an opportunity to provide patients with samples of low-cost, generic mediations that provide therapeutic benefit as well as a lower out-of-pocket cost for the long term.
The managed care organization (MCO) in this study is a large, regional Blues plan located in western Pennsylvania, with a total of 3.5 million members, 2.2 million of whom had a prescription drug benefit in 2005 and 2.3 million in 2006. Core markets include Pennsylvania and West Virginia, with additional national customers. In 2003, the plan paid more than $1.2 billion in pharmacy claims, and the average GDR was about 48%. Generic medications accounted for 18% of the total pharmacy benefit dollars spent by the MCO. The MCO recognized that by working to increase the use of generic medications, resources would become available to meet other pressing health care needs as well as to preserve the pharmacy benefit. Increasing the GDR across the entire health plan became a primary objective since the outcomes included lower costs without adversely affecting clinical outcomes, including quality of care.
The pharmacy benefit designs had been changed to encourage generic use by health plan members. Members of this MCO saved an average of at least $15 for each generic prescription filled, owing to differences in copayment or coinsurance when compared with the brand copayment amounts. The distribution of health plan members in the 3 categories of pharmacy benefit design were approximately 40% in 2-tier open, 30% in 3-tier incentive, and 30% in 2-tier closed. The most common copayments in the 3 designs were $10 for generic drugs and $25 for brand drugs in the 2-tier open, $8 copayment for generic drugs (tier 1), $20 for formulary brands (tier 2), and $30 for nonformulary brands (tier 3) in the 3-tier incentive design, and $10 for generic drugs and $25 for brand drugs in the 2-tier closed plan design.
Beginning in August 2003, this MCO implemented a previously signed agreement with a third-party vendor to provide generic drug samples to prescribers in their offices using an automated generic dispensing machine (kiosk) and system that dispensed generic drug samples and billed the MCO for the cost of these drugs. The objectives of this study were to determine (1) the impact of an automated generic sampling system in a primary care office on the GDRs overall and for the 10 specific therapeutic categories that were sampled and (2) if the intervention produced savings after subtracting program costs. In this article, physician-prescriber may also include physician extenders such as nurse partitioners and physician assistants, which constitute a small percentage of providers.

Program Implementation
To encourage physicians to increase their prescribing of generic pharmaceuticals, the MCO partnered with MedVantx, a vendor that has developed an automated system to provide sample bottles of various generic medications. This automated kiosk resides in the physician' s office at the point of care. Using this system incurs no cost to the physician practice. Unlike some office dispensing programs that require a member copayment, this generic sampling program has no cost (i.e., $0 copayment) for members.
In working with the vendor, the health plan, in the initial phase of the program, typically targeted high-volume prescribers, defined as those who wrote more than 5,000 prescriptions annually. Additionally, physicians with an average or below-average GDR as compared with the MCO' s network average were targeted, as were sites with multiple practitioners in a single office. The sampling program began in late 2003 with a pilot phase that included 10 practice sites. From the pilot analysis, the MCO decided to continue expansion of the program. At year-end 2005, 64 practices representing 301 practitioners participated in the generic sampling program. By the end of 2006, 168 practices and 631 prescribers (physicians, nurse practitioners, and physician assistants) participated in the generic sampling program.
The sampling program is complemented by academic detailing performed by a clinical pharmacist who is a full-time employee of the MCO. Academic detailing via face-to-face interaction with practitioners includes review of the generic sampling program with utilization data as well as basic education on various pharmacy benefit structures. These discussions include the anticipated effects of copayment and coinsurance on patient/member compliance and adherence, numerous documents that support first-line generic prescribing using evidence-based literature, information on the relationship between therapeutic substitution and chemically equivalent generic substitution, and patent expiration tables that keep physicians aware of the ever-changing pharmaceutical marketplace. This academic detailing is performed with all prescribers regardless of participation in the generic sampling program.
Since 2004, the managed care pharmacist has worked with a vendor sales executive to encourage physician participation in the generic sampling program. The sampling program was designed to minimize barriers to its use by physicians. Although there was no direct collaboration between health plans, many regional and national payers independently participate in the program, including 5 insurers in western Pennsylvania.
The automated generic dispensing system is free standing and measures 62 inches high, 38 inches wide, and 20 inches deep. Similar to an ATM machine and using touch-screen technology, it only takes a few seconds to use per transaction. First, the physician or her agent enters a login code and password. Second, the patient information is scanned directly into the machine from the super bill or face sheet that the physician places on the builtin scanner. This step in the process results in the capture of insurance information for the vendor to send an invoice to the appropriate insurer. This information is transmitted to the vendor electronically after the sampling event.
Third, the generic medication sample is chosen by name from a list of 21 distinct drugs available in a total of 36 options by dose and strength (Table 1). An automatic door in the medication cabinet opens and the physician selects the bottle of sample medication, labeled with drug name, dosage, manufacturer, quantity, lot number and expiration date, and a bar code that identifies that product. The physician or employee of the physician removes the bottle, scans the bar code using the builtin bar code reader on the automated generic dispensing system, retrieves the patient education leaflet and chart sticker from the printer built into the machine, and closes the door to finish the transaction.
Since these are medication samples, not prescription claims, this MCO stores the information in a database separate from other pharmacy claims data. All data that are normally captured at the point of sale in a community pharmacy are also captured here (with the obvious exception of the dispensing pharmacy' s information). All chronic medication samples are packaged in a 30-day supply (Table 1), whereas the acute medications are intended to be a full course of treatment. This packaging allows patients to use a chronic medication, at no charge, for a 30-day supply to determine its clinical effectiveness and tolerability. Additionally, the samples with a full-course treatment for acute conditions allow the patient to avoid a stop at the pharmacy to have a prescription filled. The 10 therapeutic categories represented in the machine in the present intervention were antidepressants; antihypertensives (angiotensin-converting enzyme inhibitors (ACEIs), beta-blockers, and diuretics), anti-infectives, anti-inflammatory agents, antilipidemics, antiulcer agents, oral hypoglycemics, and topical corticosteroids.

Calculation of Drug Cost Savings
Because formal statistical testing of program outcomes was precluded by incomplete physician data, we performed a descriptive, business-case analysis of the program. Since we were interested in examining the effects of the generic sampling intervention over a 24-month period, we grouped physicians by their The direct drug cost savings were estimated by comparing the GDRs for participating versus nonparticipating physicians in each of the 2 years and multiplying the net percentage point difference by the difference in net plan cost between brand and generic drugs for the participating physicians in each year. The gross savings in each of the 2 years were reduced by the vendor billings for each year, which included the vendor' s administrative fee to determine the net drug cost savings. The net drug cost savings per physician were also calculated for each year.

■■ Results
There were 301 physicians participating in the generic sampling program in 2005 and 631 physicians participating in 2006. Compared with the groups of physicians who did not participate in the generic sampling program in each of the 2 years, the average overall GDR for the participating physicians was 1.  We observed that the therapeutic categories that had the greatest change were topical corticosteroids, selective serotonin reuptake inhibitors (SSRIs), and nonsteroidal, anti-inflammatory drugs (NSAIDs) ( Table 3). In the nonparticipating group, the areas that experienced the most change were oral hypoglycemics, SSRIs, and NSAIDs. The magnitude of increase in GDR for the intervention group versus the comparison group was greatest for 4 therapeutic categories: topical corticosteroids, ACEIs, NSAIDs, and SSRIs. A return on investment (ROI) was also conducted internally by the MCO to determine the sustainability of the program. Two methods were used to estimate the ROI, both with and without the use of member cost share (i.e., copayments). The first was the direct standardization method, which considers when the charac-teristics of the standard population are applied to the comparison population to produce an expected outcome for the comparison population. 11 In our analysis, the expected outcome was the brand prescribing rates one would expect if the participants had similar prescribing behaviors as the nonparticipants. This produces a conservative estimated savings range. A second approach was a direct comparison of brand prescribing rates between the participants and nonparticipants. The absolute difference in brand prescribing rates was used to calculate a separate ROI savings range. Using these various methods and assumptions, the ROI was determined to be between 3 to 1 and 3.5 to 1 based upon the therapeutic categories represented in the sampling machine. The data in Table 2 suggest that the overall drug cost savings in 2005 were almost $3 for every $1 spent on generic drug samples and slightly more than $2 for every $1 in generic drug samples in 2005.   of generic drug sampling. Another BlueCross BlueShield plan began generic sampling in October 2000 and focused on up to 500 physicians per year who had low rates of generic prescribing. 12 In addition to providing samples of generic drugs to physicians, this intervention included 1-on-1 meetings with program pharmacists who provided the physicians with detailed clinical and cost information on generic drugs. This intervention, which preceded our intervention by several years, focused on 4 of the largest therapeutic opportunities at the time: antihypertensives, antidepressants, gastrointestinal drugs, and nonsteroidal anti-inflammatory drugs. Evaluation of this earlier generic sampling program showed that there was no effect on the overall GDR for the health plan, unlike the effect of benefit design in which the lower copayments for generic drugs were found to increase GDR at this plan.

Effects of a Physician Office Generic Drug Sampling System on Generic Dispensing Ratios and Drug Costs in a Large Managed Care
The intervention presented in the current study was automated and more comprehensive and sustainable because of the placement of an automated dispensing system compared with the earlier intervention discussed above. Our results suggest that having easy access to generic samples at the point of care was an effective tool in improving overall GDR by a small amount, and the MCO continued to promote and expand the generic sampling program throughout 2006 and into 2007. At year-end 2006, more than 600 physicians in approximately 160 practice sites had access to the generic sampling system, and by mid-2007, more than 650 physicians in more than 170 practice sites had access to the generic sampling system in their offices.
Within the overall GDR, there appeared to be several prescribing changes that took place during the study time period. Most notably, the topical corticosteroids, SSRIs, NSAIDs, and ACEI therapeutic categories appeared to have higher rates of increase in GDR in the intervention group relative to the nonparticipating prescriber comparison group. The smallest change in GDR occurred in the H2 antagonist category.
In addition to the small but favorable effect on MCO drug costs, there were other positive results. Most notably, the MCO' s relationships with physicians improved and a more collaborative relationship was formed based on physician feedback to the clinical team and testimonials. The academic detailing by the fulltime managed care pharmacist was undoubtedly contributory since the pharmacist was out in the field, visiting practitioners and providing education on the financial and adherence implications associated with generic prescribing. The pharmacist also provided information on drug formulary content and member copayment effects from generic versus brand prescribing.
Although member and prescriber satisfaction were not measured by standardized and validated survey instruments, anecdotal feedback provided directly to the pharmacist in the field from physicians and patients-members was positive regarding the generic sampling program. Physicians remarked that their patients were pleased that the health plan in general and their physician in particular were considering their out-of-pocket costs in the process of making drug therapy decisions. Patients expressed gratitude to their physicians for taking an active role in keeping their out-of-pocket expenses low. Physicians remarked that they were pleased to provide a free, full-course antibiotic or a 30-day sample of a chronic medication to their patients. Some physicians stated that this program has changed their thought process, and they are much more inclined to prescribe a more traditional, often standard-of-care, generic medication. Additionally, some have noted that having narrow-spectrum, first-line antibiotics on hand has reduced their use of broad-spectrum, usually higher-cost antibiotics. Some practitioners liked the idea that they may be helping to reduce the rate of antimicrobial resistance.
This generic sampling program was introduced first to the region by the largest insurer, but other regional plans soon joined the program independently and started paying for their respective members to receive generic samples. This multipayer model brought much more widespread physician attention to the program. The multipayer implementation also helped physicians adopt the program by removing the perceived barrier that this was an intervention conducted by a single health insurance company. The fact that virtually all insurers in the area participate in the program makes it convenient and simple for physicians. Physicians do not have to take time to think about which MCO participates in the program in order for them to provide a generic sample. Since the vendor automatically bills the appropriate MCO, the practitioner does not have to check insurance coverage in the patient' s chart. This ease of use helped to remove the psychological barrier that this program would require much additional work for the physician.
All these factors together-automated generic sampling, academic detailing, pay for performance, and acceptance of the generic sample program by most of the region' s health insurershave contributed to positively influence generic drug prescribing and dispensing. Our analysis suggests that the generic sampling program contributed to the increase in GDR, yet the other factors mentioned likely played a substantial role in the overall positive trend in which the GDR reached approximately 60% in the intervention group in 2006 and 59% in the comparison group.
Finally, there is some satisfaction for health plan administrators in supporting a managed care intervention that provides a visible and perhaps viable alternative to the common drug sampling provided by brand-drug manufacturers. Adair and Holmgren found, in a small study of primary care residents, that access to drug samples in the clinic influenced resident prescribing decisions, potentially increasing drug costs for patients. 13 Informal feedback from patients via their physicians in our study showed member support for this managed care intervention by our health plan.

Limitations
First and foremost among the limitations of this study was the small absolute difference in the GDRs between participating physicians and the nonparticipating physicians, an absolute 1. Third, the academic detailing performed by the clinical pharmacist presumably had some effect on GDRs that would have augmented the generic sampling system. However, since the clinical pharmacist detailed both physicians who did and those who did not participate in the generic sampling program, our method of analysis using a comparison group would have accounted for this coincident intervention by the clinical pharmacist in academic detailing. Fourth, a pay-for-performance (P4P) program was in operation during this time, in which about 25% of the total physician P4P measures were associated with generic prescribing. Like the academic detailing intervention, the P4P program applied to most physicians, those participating and those not participating in the generic sampling program, but the P4P program may have had an indirect effect of providing additional incentive for physicians to participate in the generic sampling program.
Fifth, this health plan had a mail-order pharmacy option, and our analysis might have been more precise if we had used cost per day rather than cost per claim. Sixth, the net savings calculation did not account for brand-drug manufacturer rebate payments that would have reduced the net cost per brand-drug claim. Therefore, our savings calculation likely somewhat overstated the net overall drug cost savings. Due to the fluctuating nature of contracts and the number of brand-name drugs that became available in these categories in this time period, this effect is not likely to be substantial.

■■ Conclusions
Physician practices that participated in the generic sampling program demonstrated an increase in GDR that was slightly greater than the increase in the comparison group of physicians who did not participate in the program. The absolute 1.